Again I protest. This matter should not be proceeded with. This section under discussion is relevant to all other sections. By the repeal of this section, and this section only, is it possible to apply any form of taxation to any type of farming profits. In that context, the entire spectrum of the farming activities and their gloomy situation at the moment can properly be discussed, relevantly and within the rules of the House.
In my view the Minister has chosen a bad time to tax farmers. I was amazed, amused and then appalled by his insistence that the farmers should be grateful that last year was so bad. It was brought home to them that they could claim in future years against their profits. That was the clear interpretation given by the Minister this evening. Whether these people survive the present crisis or not is a matter which does not seem to have entered the heads of the Minister and the Cabinet. The whole thing is madness in the extreme.
In anticipation of our entry into the EEC, and taking our deductions and calculations based on the shortfall of production of those in the EEC, our farmers were encouraged to expand and enlarge their beef output, even at the expense of other farming activities. None of these promises which were made freely against the background of our impending entry to the EEC, was justified. Farmers have been in dire straits over the last nine months and will be in even worse straits over the next nine or 12 months.
The Minister sees merit in the repeal of the exemption which was enshrined in the 1969 Act so as profits were concerned. At this stage, we should ask ourselves what will be the effects and impacts of adding this new unknown burden to the backs of the farming community, who are already bent under the impact of the losses they have suffered and have no hope in the immediate future that their losses will be recouped. Even if all the Minister's proposals were proper, right and agreeable, surely this would be the time to say that we will not add further misery to the lot of the farming community who have been so badly misled—not deliberately but misled nevertheless— so badly left out. They have lost much and are still losing heavily at the present time. At this stage should we not be doing the reverse and trying in various ways to encourage those farmers to stick it out, to hold on and to part with nothing they can keep on their farms for the better times which must come? Should we not be doing that rather than driving a further nail into the coffins of the cattle producers of this country?
One might well say—and I am sure this will be said—but these are the bigger farmers. Bigger by what amount? bigger in what way?—in the capital investment that they are carrying at the moment with no return on it and net losses against their stock as they stood 12 months ago; farmers designated as big farmers by virtue of being £100 valuation or over; a valuation which goes back 120 odd years, that in many cases has no relevance today whatsoever to the value of land in the different parts of this country.
If we are to use the poor law valuation surely the first thing that should have been done—in deciding who should and should not come within the code—was to update the code. That has been sought and talked about for longer than has the lack of taxation or a tax code on the farmers. Less has been done about it and apparently less will be done about it. We are just going to allow it meander on in its own way; let it hammer away, accepting these figures of valuation as if there were something sacrosanct about them whereas we know, for a fact, that from county to county, barony to barony, indeed even from townland to townland, we have the most extraordinary variations in valuations of land in this country. This is capable of being explained if we go back to the time when that particular Valuation Act was brought into being, in that the activities in farming at that time were different and have changed immensely since then; lands producing crops which appeared to be of a particular value at that time were more heavily valued, naturally, than those nearby producing different types of crops. But the whole scene is and has changed in many cases. If the positions of valuations were reversed as between barony and barony, parish and parish or county and county we might be nearer an equitable land valuation system than obtains at present. But we are giving no consideration to that whatsoever.
Apart from my appeal to the Minister as to the common sense and wisdom of setting aside this proposal until the weather on the sails front has cleared, there is very good reason and argument that that which is based on the Valuation Act of 1850 or thereabouts cannot, should not and could not be justifiably used as a yardstick to decide what farmer comes within and what farmer stays outside the code of taxation now proposed.
In addition to that I would add that this may merely be the beginning, that while it is being slipped in rather quietly on the basis that it is a very small percentage of farmers only who will come above the £100 land valuation, have we any guarantee that that will not be reduced to £90 next year, £80 the year after or £70 or £50 or £40 or that the valuation limit will not be eliminated? I am quite sure the Minister has no intention, nor would it be in the minds of his advisers, that any such stipulation will be given to the passage of this piece of legislation. No: I believe that what is intended here is not only to do as those who talk about the racketeers of land, land speculators and companies burying their profits, showing them as activities under farming and getting away with the exemption in the 1969 or previous Acts. I believe that in order to catch those the Minister is starting something which may well, in its own time, sound the death knell of the moderate-sized farmer, not to mention the small farmer.
It is a rather strange contradiction that we have the Land Commission strenuously trying to step up the size of farms and giving every good reason why they should so do, refusing their consent to sub-divisions, to sales. Yet the effect of the Minister's proposal for taxation of farmers— were it to continue with the £100 limit and upwards—must have the effect of fragmentation and reduction by legitimate means of the area of holdings so as to bring people under the £100 valuation and keep them outside the code he now proposes. It is my belief that while the £100 is mentioned at the moment, it is merely the thin end of the wedge; it is the manner in which it may well have been slipped across the farming community; that their fight—if they were to fight on this issue—would be for the few large farmers in the country only and not for the general body of farmers. I am amazed that the farming community has taken this in the manner they have done. The only conclusion I can reach is that they have taken such a hammering in recent times there is no fight left in them. If they were as cocky as I have seen them before, the Minister would not be attempting to put through this legislation without very drastic amendments even at this stage.
I say to the Minister that he is wrong in applying a tax code at this stage. I say he is doubly wrong in relating that tax code to an outmoded, and totally false valuation system that should have been revised every year since 1850 but which has never been touched since then and about which nothing of any practical use is being done, or is likely to be done, judging by the lack of activity by the Government in the foreseeable future.
I believe he is wrong also in adding this particular burden of over £100 valuation on those in some counties, who are paying, on that valuation, as much as £9 in the £ rates. The Minister talked here a while ago about the amount of relief being provided—I think £27 million or £30 million, some figure like that—and talked about that relief as if it were something by way of a gift to the farming community. It may well be so regarded and written down in the book but it is not done for the love of the farming community. It is done because it is believed by this and previous Governments that it was necessary that such relief should be provided because of the ever-increasing and intolerable burden local taxation has become in relation to the poor law valuation under which our land has been valued well over 100 years ago.
We are asking that they should pay on the double. I wish to leave the Minister in no doubt that that is what he is proposing to do regardless of what he says about the reliefs being given. The fact remains that the farming community are paying as much as £9 in the £ in some counties and are paying substantial sums in all areas. The relief is given because it is regarded as vital in order that the industry should prosper, thus benefiting the economy in general.
This is what all of our handouts and aids to any section is about. We do it because it is the right thing to do, that it is in the general interest. The money spent by the Exchequer on farming has been in a good cause. Agriculture is our largest single industry, it is the largest employer of labour, it is the basis of our entire economy and it is the industry that accounts for the major part of our exports. Yet in this legislation we ignore the fact that our cattle industry is our biggest single export earner and is expected to continue as such for a considerable time in the future, despite the gloomy situation at the moment.
How can we justify the relief of tax on profits earned on exports generated from other sources of industry and, at the same time, introduce legislation at this time that will hammer the farming community? It seems an absolute and total contradiction. We are also ingoring the fact that the risk in farming is an ever-present one and is not solely related to the state of the market for our cattle and beef. There is also the risk of bad weather, and this does not affect any other large industry which is enjoying relief on their export profits.
Is the Minister aware that certain industries in the country have paid more in dividends than the total capital structure of the industry in question? They did not do it for just one year; they have done it for two years and I hope they will do it this year also. In other words, they will get back three times the total output costs in the first three years of their establishment as an industry and they do this on the export market. They are able to do this because they do not pay tax on their export profits and I think that is justified. However, the people who have been practically forced into the cattle industry by the measures adopted by the various Governments have to cope with the crisis that has arisen within the Common Market.
We talk about keeping faith with farmers and other sections of the community, but no section can have the same sense of grievance as the cattle breeders and producers against the background of our recent efforts to encourage them into further production. There were glowing reports from the Common Market but despite the fact that the EEC area is short of their own requirements, supplies are coming in the back door from third countries. The result has been that there is sufficient additional cattle so that we are in the lurch, without as much as an apology from the creators of the situation.
Our Minister for Finance is going to add to that situation by slapping this imposition on the people most concerned. His only suggestion to them is what he said earlier this evening; he told them that it was well for them that they had lost so much this year because they will be able to claim it back against the profits they will make in the time between now and 1975. I hope the Minister will withdraw that statement before it is seriously examined. If he thinks about it I am sure he would not like it to be regarded as a considered statement; it would be better to regard it as a poor joke rather than a serious suggestion.
The Minister mentioned that rates formed a higher percentage of industrial profits than in the case of farming. How does the Minister know this? We do not know what profits farmers have been making as we have not been collecting taxes from them. Somebody on the Fianna Fáil side intervened to inform the Minister on the matter. The Minister said that 77 per cent of farmers do not pay rates on their land. Could we have from him another calculation and statement with regard to the percentage of rates in the profits of farmers when we consider that the total rates paid on land is, according to the Minister's statement, paid only by 23 per cent of farmers? We must relate the rates to those who pay them in the farming community and take it as a percentage rather than a percentage of the total rated valuation of the agricultural land of the country, on which 77 per cent of the farmers, according to the Minister, do not pay rates at all.
An earlier speaker, drew the Minister's attention to the fact that this new imposition of tax on the farming community, added to the existing tax that is being paid to the tune of very many millions, regardless of the millions of reliefs trotted out by the Minister, will put our farmers at a further disadvantage, and I deliberately say "further", with their opposite numbers in the Six Counties and in England. The Minister's reply to that was lacking in reality. I understood him to say that we must look at what the situation is here and that we cannot be looking outside to England or the Six Counties or elsewhere. I say we must have regard to what is being done there. We must have regard to the relative costs of production, the relative overheads, since these farmers are in the Community with us. Since they can be, and in some cases are, our competitors we must have regard to their overheads in relation to ours. The idea that we can close our eyes to what is being done there is just not sensible. We can argue, and it sounds very well, that it does not matter a damn what they are doing outside, that what we must do is keep an eye on our own taxpayers and spread the load evenly here. This is not so and the Minister knows it is not so. The statute books in existence at present are full of efforts on the part of this House at various times and for various reasons to make special provision for people in various enterprises who are in the export market with their produce, to try to put them into a competitive position with their would-be competitors in whatever part of the world they may be trading. The Minister knows this is so and he knows we will be doing it again and again in any context in which we think it is of value to us. It is no use to turn around and say to us here that what they do in the Six Counties or England is of no real concern to us, that we must have regard purely to the internal tax structure and to nothing else. That concept I do not believe the Minister seriously believes, and I totally disagree with it.
The Minister has talked about moral courage or lack of it here this evening. I would ask him to display real courage at this juncture and withdraw the whole shebang contained in this chapter of the Finance Bill. Let us get on to the rest and get finished with it without having to wait until four, five or six in the morning. He need not concede by so doing that what is proposed is, in all respects, wrong or that it is being withdrawn for that reason, but that it is being withdrawn because of the fact that it is no time to add to the burdens and fears of our hard-pressed farming community who have little prospect of their lot improving in the immediate future. This would be real courage on the part of the Minister and would make real sense of his charges this evening that others who went before him did not have the courage to do this, that or the other despite the fact that recommendations were made as many as 14 years ago.
When I heard him talk about the 14-year-old recommendations it struck me that digging it up now and putting it into operation might not necessarily imply courage but could imply many other things that would be far from virtuous, and that in fact the courage was displayed by not accepting the recommendations made 14 years ago. We set up inquiries and we set up commissions but we should not be slaves to them and indeed in the case of some of them it would be very foolish if we were. Those who are set up to sit and inquire into any particular aspect of legislation do not expect that everything they recommend willholus-bolus be taken by the Dáil and put into Statute. They do not expect it nor do we expect them to prepare it in such a manner that it could be so absorbed. If this were capable of being done there would not be any need for this House. We could set up a few committees, give them a life span of 20 or 25 years and the power of co-option, self-perpetuating, and we would never need an election thereafter. We could let them run the whole show. However, we are very far from that. The Minister, in using this 14-year-old recommendation as a justification and indeed as an argument in favour of the courage he is now displaying, could well be hiding behind a recommendation that is 14 years old, 14 years out of date, that is as far from the realities of today as the last century is and that could have misled him and his Government into doing something at this particular time that could be very wrong indeed.
I ask the Minister in all seriousness to consider the general implications without prejudice to future action in regard to applying a taxation code of this or some varied nature to farming profits against the present background of a gloomy present and an even gloomier future for the farming industry at this time. It would be a terrific morale-booster to the farming community if, even at this stage, the Minister were to take that step for that reason and without prejudice to its application or re-introduction at a time that would be more suitable and more hopeful for the community on whose back this burden is now being placed.
It is my belief that somewhere along the line a great deal of pressure may have been exerted by Members of his own party and of the Labour Party on the Government and on him as Minister for Finance to do something about taxing the farmers and those who are speculating in land, companies which were dodging the column and burying their profits in various ways through land ownership. If he thinks he is catching them by doing this he should have another think. I can visualise the full impact of what the Minister is proposing here having the reverse effect on, say, a farmer with a valuation of £120, £130 or £150 who is genuinely farming and who may have built his farm up from a very small beginning over the years and have worked hard to repay the money he expended in purchasing all or part of it, in modernising it, in building and bringing it into good fertility.
These farmers are now faced with the difficulty of getting labour to work as farms must be worked for an unreasonably long number of hours at certain times of the year and working over week-ends, as they must do in the dairying industry, the difficulty of getting a labour force to do this sort of work, added to the soaring costs of every single item which goes into farming today, the alarming rises that have taken place even in the last 12 months, together with the new imposition that is enshrined in these proposals which will bring about the situation wherein the books must be kept and, as my colleague earlier said, the accountant must be brought in.
I know a number of farmers who are very concerned about this particular aspect of the matter and who are seriously contemplating getting out, while they are capable of doing so, and leaving the headaches in the future to somebody else. I can see a lot of genuine, good and useful farmers doing that because it must be known to the Minister and every Member in this House that if the capital value of land were to be realised by anybody with a land valuation of £100 and upwards today, together with the stock, machinery, equipment and so forth, what he could get on the open market for the money he would realise on such a sale would be anything up to five to ten times greater than he is capable of making by working hard on his farm at the moment, and nobody else in any other walk of life would work so hard for any money at the present time.
Is the Minister intent on driving out the farmers who farm not only for profit but because it is their way of life, getting in the big combines, getting in the companies and the bigger units, which are now being sought after not only by the Land Commission, for their own good policy reasons, but by the EEC and all that we hear coming from behind the scenes there? Is this where we are going? Is this part of the pattern that is devised to bring about the situation of the huge farming complexes in the future to the exclusion of the traditional farming community in this country? If those people were over the years and at the present time to measure their profits and set beside that their efforts and the hours they put into the work on their farms and think in terms of how much more they could get by realising the lot and investing their money in gilt edge securities, surely the Minister must realise that these people have a place in the community, that they should be retained, that it is vital they are; and if the time comes when these people are driven out and are replaced by the very type the Minister and his Government seem to be trying to prevent accumulating land in this country, he will be a sorry man then and we will all be sorry but it will be too late.
It is for these reasons that I say again to the Minister in all honesty, no political gimmickry whatsoever intended, that this measure is ill-timed, whatever about being ill-conceived or badly constructed. It should not in my estimation be pursued further at this particular juncture. I believe the Minister can honourably, without any loss of face, withdraw this part of the Bill without prejudice to his actions in the future and do it for the reason that farming as an overall industry is going through a very bad time, a time contrary to the promise we all felt was there a few years ago and which we believe will return. The Minister could thus give a boost to the farming community at a time when they badly need it. It is about the only thing he can give them at this time, particularly in the cattle and beef industry of this country. The Minister stated in another context that the losses made this year can be written off. If the losses are made in the coming year the Minister cannot expect to lose anything by not applying these taxes, so he does not have anything to lose financially. He does not have any face to lose in the matter and he does not have any political side to consider in this matter at this time. He could help the farmers' morale greatly, he would show the courage he has been talking about here this evening, and he would be applauded for it. I think the Minister is man enough to do it. I hope, while he is thinking of saying no at the back of his mind he is still considering saying yes.